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Costa Rica Government Consumption

Costa Rica Government Consumption

Government Consumption in Costa Rica

The economy of Costa Rica recorded an average growth rate of 2.4% in government consumption in the decade to 2022. In 2022, the growth rate was also 2.4%.

Costa Rica Government Consumption Chart

Note: This chart displays Government Consumption (ann. var. %) for Costa Rica from 2014 to 2023.
Source: Central Bank of Costa Rica.

Costa Rica Government Consumption Data

2018 2019 2020 2021 2022
Government Consumption (ann. var. %) 0.6 5.9 0.8 1.7 2.4

Economic growth records slowest increase since Q3 2022 in the first quarter

GDP growth moderated to 3.7% year on year in the first quarter, down from 5.0% in the fourth quarter of last year. Q1's reading marked the worst reading since Q3 2022. On a seasonally adjusted quarter-on-quarter basis, economic growth lost momentum, cooling to 0.4% in Q1, compared to the previous period's 1.2% jump. Q1's reading marked the slowest expansion since Q2 2020.

The deceleration was driven by softer growth in private consumption and exports. Private consumption growth fell to 3.9% in Q1, marking the weakest expansion since Q1 2023 (Q4 2023: +5.8% yoy). Public spending, meanwhile, rebounded, growing 0.3% in Q1 (Q4 2023: -0.1% yoy). Additionally, fixed investment also bounced back, growing 0.6% in Q1, contrasting the 0.2% decrease logged in the previous quarter. On the external front, exports of goods and services increased 2.6% on an annual basis in the first quarter, which was below the fourth quarter's 6.4% expansion. Conversely, imports of goods and services growth picked up to 2.6% in Q1 (Q4 2023: +1.2% yoy).

In the coming quarters, the economy should grow at a similar pace to Q1, below 2023’s sharper pace of expansion. Growth of both domestic demand and exports is set to cool, partly due to a high base effect. The pace of monetary easing by the Central Bank of Costa Rica, the country’s security situation, and the strength of the U.S. economy are key factors to track.

Mauricio Monge, economist at Oxford Economics, commented on risks to the outlook: “Downside risks persist, particularly concerning potential supply shocks triggered by heightened political conflicts in the Middle East, which could exacerbate supply chain disruptions. […] Moreover, constrained government spending and rising insecurity levels may fuel increased social discontent”.

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Costa Rican government consumption projections for the next ten years from a panel of 9 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable government consumption forecast available for Costa Rican government consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Costa Rican government consumption projections.

Want to get access to the full dataset of Costa Rican government consumption forecasts? Send an email to info@focus-economics.com.

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